The History Channel has a pretty compelling show on their hands that got me thinking about the audio video world. In 2004, flat HDTVs sold for $8,000 and had a volume of profit in them that could sustain a brick and mortar store. The housing boom was thriving and people spent the equity out of their houses to improve their AV technology, including goodies like home automation, flat HDTVs, home theaters, distributed music systems and more. Five years later, things are completely different. The banking collapse in September of 2008 was second only to The Great Depression of 1929, to United States economic traumas leaving the stock market battered and reports of one in eight homes in foreclosure even to this day in 2010. Also during that period the driving force behind the new traffic that kept stores in business were people seeking flat HDTVs. Those HDTVs now cost 20 cents on the dollar compared to what they did in 2004. 50 inch HDTVs are sold today with profit margins that are so thin, a $1000 sale might yield less than $100 in profit. While that might work for a Costco or Wal-mart, brick and mortar specialty AV showrooms are suffering.
The question is - do you care if your local specialty AV store goes out of business?
Clearly, you don't get a sales pitch at Wal-mart or Costco and even the big box stores like Best Buy often can offer little more than a clerk to take your order, assuming you are lucky enough to catch their attention. Without question, online retailers offer better customer service and even other goodies like free or low-cost shipping. Many consumers have moved their loyalties to online stores, but for high end products do you really want to get your demo on a computer screen or over the phone? When I buy a pair of $28,000 Wilson Sasha WPs or an Audio Research REF5 preamp - I want to hear it first. I want support on the product. I want it delivered to my house. I want a proper trade in. I want it all. Stores that sell cereal and HDTVs one aisle apart can't do this.
The future of specialty AV retail is in question. There are signs that the economy is slowly recovering from The Great Recession of 2008-09 but the recovery is slow and the companies that are thriving are built for the values of the New Economy going forward. Retailers have to understand that video - even the newest high end 3D HDTVs - is a commodity and that if you can't sell audio, automation, distributed music systems and full home theaters, it's likely time to close up shop. The customer who yesterday would have bought a $20,000 pair of audiophile floorstanding speakers might today want to see/hear a $35,000 Wisdom Audio in-wall system (it's really good by the way) that takes up no floor space and has full room correction. The customer who would have bought a $8,000 CD player 10 years ago today needs to be shown a Meridian-Sooloos server. They need to experience the iPhone-like touch screen access to full libraries of music. They need to see what incredible meta data can do for the way you enjoy music as compared to an iPod. Dealers need to invest in the most badass new, luxury goodies so that they can tempt their best clients to spend in the future. Sticking their heads in the sand hoping to make money in video like it's 2004 again is a recipe for Life Without Dealers.
The Onus is not only on dealers. Much the way people in big cities are starting to embrace the Alice Waters "slow local food" movement by spending their money at Farmer's Markets - they have to support their local dealers too. If you like the fact that your local dealer has a rack of audiophile gear for you to audition, perhaps you should buy your next 60 inch HDTV from them for a few hundred dollars more just to support their overhead. Force local dealers to be price competitive, but not always to price match the Internet. Do you think that Amazon cares if you don't have a specialty AV store in your neighborhood anymore? Not at all. Think twice before you go out of state to buy a product to save tax. Consider buying new over used on eBay and Audiogon.com when the difference isn't too great. Consumers have a responsibility to keep the art of the AV demo alive and it is completely fair to suggest to the proprietor of your local store that you spend more to support him and expect the same kind of support back in return. I have that type of relationship with my Mac store, Mac Enthusiasts on Pico Boulevard near the Fox Lot in West Los Angeles. While I pay a small percentage more than when I buy computers online - they have TRUE Apple geniuses there who make their careers selling high end computer systems. They provide me with support, service and insight that I can't get from some nameless online site that sells a laptop for $75 less. For me, the extra money is worth it each and every time.